tv Your Business MSNBC March 5, 2011 5:30am-6:00am EST
♪ hi, everyone, i'm j.j. ramberg, and welcome to "your business," where we give you tips and advice to help your business grow. nothing quite says glamor like a hollywood movie star. and if you're in the business of selling high-fashion items like handbags, nothing quite beats having a celebrity photographed carrying your product. but getting to those headliners can seem like an impossible task. in today's story, we meets an entrepreneur who shares her secret for how to reach the stars.
>> welcome to hollywood, baby. >> let's not even talk about. it let's go. >> jessica alba, fergie, cameron diaz, britney spears, minnie driver. >> this is just a partial list of celebrities who have been photographed holding a bag made by los angeles-based small business owner cara kurtz. >> we took, you know, pieces of our classic and tried to make it a little more mod, you know, '60s. >> when it comes to publicizing a high-fashion item like a handbag, cara says a picture of a celebrity clutching your clutch in a magazine is far more effective than any paid advertising. >> every time we got press, it was a huge spike in our sales. not only would we get ten new stores, we would sell -- you're talking 55 to 100 bags on the internet within 48 hours. >> cara recalls what happened two days after britney spears took one of her signature bags on a short vacation to europe. >> we started getting crazy phone calls from london, saying where do i get this bag.
we're like, why are people from london calling us. turns out britney had taken the bag and 48 hours later was in london running around town with this bag. that's how, you know, word-of-mouth -- next thing you knew we were in london. that's even more expensive, isn't it? >> yeah, this one's more expensive. >> while cara has a bag and an impressive line of stars to wear the bags, more impressive is the p.r. budget she used to get the press. >> my public relations budget when i starred was zero. no money. there was no budget. was me, which i didn't pay myself. so there was no money. >> that's not exactly true. at first, cara spent thousands making a costly mistake which taught her she was better off not spending any money. >> it was a $it,000 lesson. -- $3,000 lesson. i don't know that i want to have many more lessons that cost me $3,000. >> the mistake was hiring a big-time p.r. narm promise today
to contact celebrities like demi moore and give them sample bags with a handwritten bag from cara. >> i would write a note, "dear demi moore, this is why you should wear this bag." we gave away bags and wade. weeks -- waited. weeks and months went by. no pictures, no buzz. no nothing. >> after the agency dropped the ball on reaching the celebrities, she decided to focus on the celebrity assistants, the ones who manage their schedules, rather than the a-listers themselves. >> i gave them -- assistant a bag and said, okay, if your client likes your -- your boss likes this bag and wants to wear it, she keeps it. you get to keep the bag no matter what for helping me. if she doesn't like it will you give me feedback. >> the first success came with no warning. >> i opened ""people" magazine, and there is cameron diaz holding the bag. huge picture. i jump up out of my seat, i'm next to a total stranger, hit the ceiling, freak out.
i was so excited. it was the biggest rush i've had in my life. lined with neon that lights up in the dark, they're the hot new handbag for hollywood. >> that was just the start. >> she cold called me one day and said "i have that their fabulous purse -- i have this fabulous purse and really want it on your show." i said, "what is your purse?" >> that's hollywood stylist claire hammonds. she said cara found her name in the credits for the tv show "the o.c.," had she was working there. cara kept on calling until claire took the call. >> the girls needed a cute little cocktail purse. at the time she was doing mostly cocktail purses, you know, clutches. and it worked. they came in every single color and material. it was perfect. >> since then, cara says the cornerstone of her marketing strategy can be found in drug store fan magazines. >> what i look for is each celebrity's style as well as i look for stores. if you really pay attention in these magazines, there's always some tidbit about a little store
in the middle of like new orleans, and they'll name the store and say, oh, jessica simpson during her filming stepped into this store. you look and go, well, there must have a reason she stepped into that store. >> even a tiny scrap of information like that is plenty to get cara dialing. >> i look the store occupy line and call and say, hey, why don't you take a look at us. you had jessica simpson come in, guess what, i already have carrie underwood as our client. i think our bag would be a great fit. i've gotten deals on my own. >> since 2004 when the company launched, she's had revenues of more than a million dollars thank largely to her resourceful attitude. >> i think people thought i was crazy when i was like, i'm going do my own press. like, you know -- i don't think people do that, you know. they don't think they can do that. >> perhaps more than the money, it could be the sizzle of hollywood glamor that gets her going each day. >> i had never met cameron diaz before she wore my bag, i had
never met britney spears. i had never met jessica alba, never met fergie. these were people that were in magazines that i admired their fashion. and there's nothing as amazing as seeing your product on that person. when you open up a magazine, you're like, wow, they chose to wear my bag. ♪ we get this question all of the time -- how do you get your product into the hands of celebrities? well, cara found one way to do it by going to personal assistants. for more let's turn to this week's board of directors. gavin kiley is founder of -- and ceo of gbk productions, a luxury lifestyle gifting company specializing in entertainment marketing. stella grizant is managing director of ladies who launch for new york and new jersey. and rod kurtz is the executive editor of aol small business. great to see you. >> thank you. >> i want to start with you, gavin.
i have this question a lot. i'm assuming somebody pays you and you get their product into the hands of celebrities. >> that is correct. yeah, no. >> it sounds so easy. >> i have taas, cara did -- i have to say, cara did an amazing job on her own. i'm impressed. >> kara took a lot of luck. we say if you can pay something and get results that you know are going to happen, that's the best way because then you know it's guaranteed. but when you go through, how guarantee sudden it that you're going to get a big celebrity to look at your bag or your sunglasses or whatever it is that you're selling? >> well, there's never any guarantees in life, of course. one thing that we always do within our gift lounge is there's always 60 or 70 different celebrities that come through. and real at the's all about a quid pro quo. meaning the designer or the owner of a particular product is actually there on site. they have the opportunity to meet the celebrity, hand the celebrity their product and get the photo taken with the celebrity and their product so
they can use the photo. >> so they keep the photo. it's not like "us" or "people" is there. >> they do keep that photo, and then it would make a designer like cara's job even that much easier because they can submit photos to the "us weekly" the "in touch," "people" magazines of the world. in addition, the magazines are on site, as well. so the designers or the owners of the companies have the opportunity to speak to the press, too. >> got it. it's p.r., right? p.r. is just hard and you don't know if what you put out is what you're going to get out of it. and cara did a really amazing job. but it seems hard. even still. >> well, i think the first thing you have to do is you have to line up and know who your target is. what are the values of your target audience, what are they interested in, what are their attitudes. then line up who the celebrities match up with. you don't want to give away $200 bag just to anybody. so why not -- when a celebrity approaches that's right for your brand, you want to make the
connection. then you want to be able on spit out your special sauce as soon as you can. so what is unique about your product, unique selling proposition. give them a story to engage in really fast. >> let me simplify this, it's the kardashians world, we're just living in it. this is huge for a lot of companies that we cover. everything from sort of the fashion and accessories that to see products you wouldn't necessarily think of. celebrities are people, too. they use every day products. one thing i tell entrepreneurs about p.r. with celebrities, they want to get on oprah, on tv. you have to make sure your company's in a position to benefit from the p.r. if you can't fulfill 5,000 orders overnight, there's no point in doing this. you make sure your company is ready and you don't want this p.r. outreach to come at the expense of the nuts and bolts of running your company. >> absolutely. gavin, cara had a bag on britney spears and got calls from london. is that typical in your world? is that -- that seems like a lot. britney spears holds a bag and she gets 200 calls from london.
>> it really is typical. i have a company and we won't any names on the show, but they literally invested $50,000 with us in one year and got a $2.4 million roi based on the press they received. in addition, they got over $1 million in sales. it really is a tremendous opportunity to get a lot of free press. and frankly, what happens is when you're in these magazines, it's better than ever running an ad. >> i think the thing we're not even mentioning that's become a huge mess is social media. someone from the mainstream media, i hate to say this. you can do an end around with the media. you don't need the magazines, you can do it on twitter, facebook. celebrities have several million followers, you get one tweet and that's gold. >> to care agetting to the a -- to cara, getting to the assistants is great. >> knowing who they pay attention to could be more
provocative than going straight to them. >> sometimes you can't get to them. >> then they're going after them. >> you can get to them through me. >> all right. thank you very much for coming on. we appreciate it. >> thank you. as a small business person, how can you take advantage of a city's dominant industry? we caught up with two entrepreneurs who found a niche in the l.a. market and have proven you don't have to be a movie star to make it big in hollywood. >> hollywood, los angeles, it's just a destination everybody wants to experience. ♪ >> no question, los angeles is a celebrity town. turning out blockbuster films, overnight movie stars, and scores of small businesses capitalizing on the entertainment industry. for nearly seven decades, this family has been running the
formosa cafe, a historic hollywood haunt. >> it originally of the production office for douglas fairbanks and mary pickford while they were building the studios. >> because of its proximity to the major studios during hollywood's golden age, formosa quickly became a popular hangout. a watering hole for the wheelers and dealers of the day. >> clark gable, humphrey bogart, it was one of those places where since we were centrally located, you can come in, you know, basically order a drink, a meal, place a bet. probably cash your paycheck. was like a one-stop shop. and that kind of gave its allure as a place you can go to see a celebrity, maybe see a wise guy. and hang out with them. >> it's that cache that has kept the doors open and visitors flocking. ♪ >> deals are still being done in these legendary booths. while sitting in elvis' favorite spot, kevin spacey agreed to star in "l.a. confidential."
♪ you ought to be in pictures >> this booth was where they filmed "l.a. confidential." >> was an autograph? write to mgm. >> since when do two-bit hoods and hookers give out autographs? >> john says business boomed after being featured in the oscar-winning film. he says that the key to maintaining success in a town teeming with ultraexclusive vip loujs is to make everyone feel comfortable. whether it's brad pit who once celebrated a perfect here or a tourist visiting from out of town, all customers are treated the same. ♪ ♪ marlon brando >> and block built her business by capitalizing on hollywood's allure. >> this is the house that hattie mcdaniel was able to buy after she won her oscar for "gone with the wind." >> she gave my friend and me a first look at her vintage hollywood tour, a favorite among her clients. in her not-so-vintage hybrid
suv. >> sometimes people are almost embarrassed. they think, oh, this is so corner. no -- corny. no, it's not. if you've never seen it before, it's great, it's exciting. >> block named her company take my mother, please, after friends would call begging her to show their visiting moms the town. like many, she moved to los angeles in 1991 to pursue acting. but her hobby quickly took over. >> one day i got a dpraul my agenting to to see an audition, and my first thought was, i'm planning a tour. and that's when i knew that i had fallen off that fence. >> since then, block has been busy finding the lesser known history of hollywood. during our tour, block showed us many sites the tour buses pass by. the famed bullocks wilshire department store where everyone from libya taylor to rita hayworth would buy custom
designed threads to the chateau marmont and union station where barbra streisand and robert redford said their good-byes in "the way we were." >> some tour companies have a bus, you get on the bus, there's a script. you don't know the people you're on the bus with. you can still have a great time, don't get me wrong. but it isn't the same as having something created just for you that's very personal. >> it's that personal touch in a city that so many want to be a part of that block says keeps her calendar booked. ♪ when we come back, we'll answer your business questions, including one on how to reach customers of a competitor that's going out of business. and part two of our conversation with guy kawasaki about techniques that will keep your customers coming back.
i'm sam chernin, owner of sammy's fish box. i opened the first sammy's back in 1966. my employees are like family, and i want people that work for me to feel that they're sharing in my success. we purchase as much as we can on the american express open gold card so we can accumulate as many points as possible. i pass on these points to my employees to go on trips with their families. when my employees are happy, my customers are happy. how can the gold card help serve your business? booming is taking care of your business by taking care of your employees.
>> especially not now, thing are happening quickly. >> it's hard and people are throwing around nickels like manhole covers. it's a different world. >> then you talk about creating an ecosystem which -- >> yes. >> i suppose in some way that hits the ego of your customer, if they're doing something with a group of people that are doing it, that make them feel better? >> yes, it's good for everybody. it gives the customer peace of mind because there's social proof. it's not just a company, it's a company and this company has retailers and developers and vars, and it has a conference, and it has a forum, and it has user groups like apple does, like harley does. >> and then why don't you talk about -- don't use money, don't use money to incentivize people. >> there's a line of thought that everybody's for sale or at least for rent. so the thinking is, well, if i offer people a piece of the action, if i offer people an affiliate program or commission, they will become my salespeople, they will become my evangelist,
they'll baseball enchanted by -- they'll become enchanted by me. that's a dangerous assumption. when money enters the picture the relationship change on both sides. if you are the evangelist and enchanter, you will some days wake up and say to yourself, am i doing this because of the affiliate fee or the commission, or am i doing this because i truly believe this is the best computer, the best tire, the best restaurant? >> so that means then when you find these evangelists, you have to do work to find people who truly believe it and you don't want to corrupt them with money? >> it's even simpler. usually the best people find you. you don't have to find them. introducing money into the equation can be a very big mistake. as i said, these people will then ask themselves why am i doing this. and the people who are the recipients of their efforts, evangeli evangelism, going to ask the flip side of that question which is why is this person enchanting me. why is this person evangelizing
me? is it because they truly believe in the product, or is it because they're making money? >> guy kawasaki, thank you very much. you were enchanting on the program. we appreciate you giving us tips. >> thank you very much. mobile technology is changing the way people connect. here now are five handy networking apps courtesy of "inc." magazine's web site. before you get on a cross-country flight, take on a web-based application where people put in their flight information. sick of handing out business cards? with vump -- with bump you can exchange contact information by tapping iphones. if you're at a trade show or convention, who's here can be a helpful way to find out a little about the way in your immediate area. the four-square app can connect you with people frequenting your business. and if you juggle multiple phone numbers, the google voice app can help you route them all to one phone. it can also transcribe voicemails and send them to you as emails.
time now to answer some of your business questions. stella and rod are with us again. the first is a question from the owner of a flower shop. she writes, "i'm a florist in a town of about 70,000. there are two well-established flower shops that are closing. i don't believe they're selling their businesses, just closing the doors and retiring. my question is, how do i go about obtaining their customers? i wondered about buying their phone number or customer list, or do i do something else?" you're shaking your head. >> this is an exciting gold mine. she or he needs -- what i would do first, $70,000 is not a -- 70,000 is not a big town. contact the owners first, do it with integrity. not only can you have an opportunity to take that customer information and i would do the web domain, forward it to your web domain, you also have a huge p.r. opportunity right now. i would actually approach them and talk about how you can do a big campaign, integrating their customers to your stores. have a special bouquet that's in honor of their store closing
down. donate a portion of proceeds to the owner's favorite nonprofit. it's a win-win. customers from their store will feel excited to come to your store. it could be exciting. >> i agree. there's something to be said for being the last man or woman standing. a great problem to have. what they're mentioning, the phone, is a great idea. this p.r., transitioning to the next generation of florists could be great. if you come to people in good faith, retiring, you say you've served this community so well, we want to pass the baton here. they might take you up on it. >> i think so, too. these guys are just closing their door. so anything you offer them is -- is extra. they are not expecting anything now. >> and you might want to buy google ads. if they're searching they come up with you. >> great point. >> the next question is about getting access to capital. >> as a small business, i'm having trouble finding sources for funding or loans virginia
tech effectively. i -- very effectively. i have business plans large and small, and i've gone to many banks. wondering, are there effective ways for me to find, as a small business, to find sources for financing? >> so this is probably the question we get the most. we have a series on here called "where's the money." i could start rattling off what we've done. what have you found? >> my question for don is how much are you looking for. that's an important question. earl oh companies say i'm -- earl y on they're trying to fin money, and the first source is friends and family. if you're looking for a relatively small amount or a big amount if you have a big enough family. banks, we're seeing an uptick in bank loans. you know, my first instinct would be to tap your personal network and see what you can get going. >> i agree. and a great source so you don't have to have the awkward conversation with rich uncle henry. >> around the dinner table. >> is go to profounder.com.
they handle that stuff for you. it's streamlined, a great way to send it to not only friends and family but the person you just met at a networking event. that's a great place to go. and then also kick-start is a great place why you're not actually giving away equity of your company. cuff post your business idea right there and collect the funds. >> again, profounder also, it's not equity, it's revenue. >> revenue, yes. >> future revenue. if you want to keep hold of the ownership of your company. >> absolutely. >> let's move to the next one from brian. he writes, "i watch your show every week," thank you, brian. "and one major subject keeps coming up. social media. i use facebook to promote my business, i put out facebook specials and post relevant articles i find helpful to my friends. i don't seem to get feedback or takers. any advice on what a small, one-person business should post to attract customers?" what i love about this question is he's not just saying i'm putting up coupons. he's saying i'm putting up relevant material. mariners not working.
>> it's -- it's not working. >> it's tough. facebook is 500 million strong, twitter less than that but growing significantly. it's become cheaper and easier to get a message out there. so there's a lot of junk frankly. the key thing for facebook and especially twitter that i've found is you have to engage your followers and friends. you know, you have to reach out to them pro-actively, pose questions, get their feedback on different things. >> that's a good idea. questions, not just post articles but questions. >> everyone loves a digital soapbox. you have to engage, if you follow, retweet, they feel a little love from your company, that's going to get them responding. >> absolutely. i think there's two thing. there's the 90-10 rule. 9 % is valuable content -- 90% is valuable content, 10% promotion. in that framework, i would operationalize some things, using heatsuite or tweetdeck, where you can feed relative content. you don't have to worry, it's out there and done. so once you have that operation
set i would engage in conversation like you do. also i would get your most passionate customers out there, do a story, to a feature about them. tag them in photos so that it appears on their own page. and then their friends will see that they're engaged. >> don't be afraid to personalize it, too. >> absolutely. >> they think, oh, i'm a formal company, i've got to say here's the latest special. they want -- >> aa rod kurtz. >> you can find that any day. thank you very much for the advice. we really appreciate it. and if any of you have a question for our experts, go to our web site. the address is openforum.com/yourbusiness. there just hit the ask the show link. check out our web site of the week.
it's openforum.com/yourbusiness. you'll find all of today's segments plus web exclusive content with more information to help your business grow. and don't forget to become a fan of the show on facebook. we look forward to getting some of your feedback. you can follow us on twitter. next week, we meet the owner of an indoor beach volleyball business who is creating a community with his company. >> four or six people walk in the door and never played volleyball in their life, i'm more than happy to go out and show them the fundamentals, the skills, how to get going, how to really enjoy it. >> we'll tell you why semipro
and notch is volleyball fans alike are traveling from near and far for a chance to play at the fake beach. until them, i'm j.j. ramberg and, remember, we make your business our business. i grew up in the bronx. i just loved it here. i'm sam chernin. owner of sammy's fish box. my uncle owned a restaurant up on city island. and we started going to the restaurant in the summers. 8, 9, 10 years old. i knew immediately that this is what i like, never dreaming that i would own seven restaurants. i want people that work for me to feel that they're sharing in my success. so we purchase as much as we can on the american express open gold card. and we accumulate as many membership reward points as possible. and use those points to reward our employees. they get a trip with their family, and some wonderful memories.